Ms. Doerr: The question investors ask most often is, "Are water utilities at risk of not getting the rate increases they need because public utility commissions are worried about the impact on consumers?" To date we have not seen companies unable to get rate cases completed nor any evidence that rates of return on capital investment are contracting.
TWST: We keep reading stories about the magnitude of the infrastructure problems
in the water space. What does that mean longer term for the industry?
Ms. Doerr: The EPA's 2007 drinking water infrastructure needs survey states that
335 billion will be needed over the next 20 years for US drinking water
systems. Of this amount, over 50% is needed for transmission and distribution
upgrades, i.e., pipes. This really isn't a new trend. Long term, it means the
industry will continue to invest capital to rehabilitate the aging systems,
which will drive earnings growth.
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